America's Broken Politics Is Breaking Economics, Too
Now, in economics as in politics, it is no longer left versus right; it is moderates versus populists. The question isn't so much the optimal size of government in a global market-based economy, it is whether it the economy is positive or zero-sum and how it entrenches power.
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Circle stock rises after quarterly revenue beats estimates in first earnings since blockbuster IPO
Circle (CRCL) stock jumped 2% in afternoon trading on Tuesday after the stablecoin issuer posted better-than-expected quarterly revenue for the first time since going public. The company reported second quarter total revenue of $658 million, versus the $647 million analysts expected. CEO Jeremy Allaire said the company's stablecoin, USDC (USDC-USD), was the "fastest-growing major stablecoin over the past year." USDC in circulation grew 90% year-over-year to $61.3 billion at quarter end, and has grown an additional 6.4% to $65.2 billion as of Aug 10. "Overall activity globally in the digital asset economy has been growing," Allaire told Yahoo Finance on Tuesday morning. "We're continuing to see growth in the use of dollar digital currencies like USDC as a store of value around the world in cross-border settlements," he added. "Use cases continue to expand, and I think people are finding that this is an incredibly high utility, new form of money." The company also announced ARC, a new blockchain network for stablecoin finance that will launch in the second half of the year. "We wanted to create a way for institutions to pay fees on blockchains in a fast, predictable manner that would be simple from an accounting perspective and could deliver very low-cost and stable fees," CEO Jeremy Allaire said during the company's earnings call on Tuesday morning. The stock is up roughly 480% from its IPO price of $31 per share as crypto-friendly legislation has lifted the sector. Circle has been at the center of optimism over the stablecoin market following the passage of the GENIUS Act, legislation that creates guardrails and a framework for digital tokens backed by assets such as the US dollar. Circle makes much of its money from interest income, specifically from short-term Treasury bills backing its stablecoin, USDC. The company's reserve income increased 50% year over year to $634 million, primarily from an 86% growth in USDC stablecoin circulation. Allaire indicated if the Fed reserve cuts interest rates and yields on short term treasuries decline, the growth of stablecoins will offset decline in rates. "We believe that lower interest rates are going to be accelerative to the business, as money velocity picks up, as invested capital picks up, and as more people are putting money to use in the economy, this very high utility form of money will grow," said Allaire. The company also shares part of its revenue with Coinbase (COIN), a major distribution partner. Last month, Compass Point analyst Ed Engel flagged the risk of rising distribution costs as the company expands its network while continuing to share a portion of its interest income. On Tuesday morning, Engel said Circle's gross profit margin guidance of 36% to 38% for fiscal year 2025 "slightly underwhelmed." Engel said that forecast implies second half margins will come in below the first half of the year's 39%, writing "we would have expected higher gross margins in 2H25." "While CRCL's lower margin guidance could be due to conservatism, CRCL's recent partnerships don't seem to benefiting the near-term margin outlook. As such, we reiterate our Sell rating and $130 PT," he wrote. However, others on Wall Street saw the stock as a way for investors to participate in rising enthusiasm over stablecoins. "CRCL is a global leader in stablecoins and is the purest stablecoin play in the public markets right now, and we anticipate further gains in the shares as the company creates new opportunities for itself and its partners," Seaport Research analyst Jeff Cantwell wrote last month. The analyst has a Buy rating and price target of $280 on the stock. Circle's results come as the overall market hovers near all-time highs and crypto rallies on expectations of Federal Reserve rate cuts and President Trump's push to include crypto in 401(k) plans. Prior to the earnings release, Wall Street analysts had nine Buy, five Hold, and four Sell ratings on Circle stock. Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre. Click here for in-depth analysis of the latest stock market news and events moving stock prices
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27 minutes ago
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China Urges Firms to Avoid Nvidia H20 Chips After Trump Resumes Sales
(Bloomberg) -- Beijing has urged local companies to avoid using Nvidia Corp.'s H20 processors, particularly for government-related purposes, complicating the chipmaker's return to China after the Trump administration reversed an effective US ban on such sales. Sunseeking Germans Face Swiss Backlash Over Alpine Holiday Congestion New York Warns of $34 Billion Budget Hole, Biggest Since 2009 Crisis To Head Off Severe Storm Surges, Nova Scotia Invests in 'Living Shorelines' Five Years After Black Lives Matter, Brussels' Colonial Statues Remain A New Stage for the Theater That Gave America Shakespeare in the Park Over the past few weeks, Chinese authorities have sent notices to a range of firms discouraging use of the less-advanced semiconductors, people familiar with the matter said. The guidance was particularly strong against the use of H20s for any government or national security-related work by state enterprises or private companies, said the people, who asked not to be identified because the information is sensitive. The letters didn't, however, constitute an outright ban on H20 use, according to the people. Industry analysts broadly agree that Chinese companies still covet those chips, which perform quite well in certain crucial AI applications. President Donald Trump said Monday that the processor 'still has a market' in the Asian country despite also calling it 'obsolete.' Nvidia and Advanced Micro Devices Inc. both recently secured Washington's approval to resume lower-end AI chip sales to China, on the controversial and legally questionable condition that they give the US government a 15% cut of the related revenue. But even with Trump's team on board, the two companies face the challenge that their Chinese customers are under Beijing's pressure to purchase domestic chips instead. Beijing's overall push affects AI accelerators from AMD in addition to Nvidia, one of the people said, though it's unclear whether any letters specifically mentioned AMD's MI308 chip. Shares of Chinese AI chip designer Cambricon Technologies Corp. surged to their daily limit of 20% on the news of China's guidance, leading a rally in peers such as Semiconductor Manufacturing International Corp. Beijing's stance could limit Trump's ability to turn his export control about-face into a windfall for government coffers, a deal that highlighted his administration's transactional approach to national security policies long treated as nonnegotiable. Still, Chinese companies may not be ready to jump ship to local semiconductors. 'Chips from domestic manufacturers are improving dramatically in quality, but they might not be as versatile for specific workloads that China's domestic AI industry hopes to focus on,' said Homin Lee, a senior macro strategist at Lombard Odier in Singapore. Lee added that he anticipates 'strong' demand for the chips the Trump administration is allowing Nvidia and AMD to sell. Rosenblatt Securities analyst Kevin Cassidy said he doesn't anticipate that Nvidia's processor sales to China will be affected because 'Chinese companies are going to want to use the best chips available.' Nvidia and AMD's chips are superior to local alternatives, he said. Beijing asked companies about that issue in some of its letters, according to one of the people, posing questions such as why they buy Nvidia H20 chips over local versions, whether that's a necessary choice given domestic options, and whether they've found any security concerns in the Nvidia hardware. The notices coincide with state media reports that cast doubt on the security and reliability of H20 processors. Chinese regulators have raised those concerns directly with Nvidia, which has repeatedly denied that its chips contain such vulnerabilities. The Financial Times reported that some Chinese companies are planning to decrease orders of Nvidia chips in response to the letters. Right now, the people said, China's most stringent chip guidance is limited to sensitive applications, a situation that bears similarities to the way Beijing restricted Tesla Inc. vehicles and Apple Inc. iPhones in certain institutions and locations over security concerns. China's government also at one point barred the use of Micron Technology Inc. chips in critical infrastructure. It's possible that Beijing may extend its heavier-handed Nvidia and AMD guidance to a wider range of settings, according to one person with direct knowledge of the deliberations, who said that those conversations are in early stages. AMD declined to comment on Beijing's notices, while Nvidia said in a statement that 'the H20 is not a military product or for government infrastructure.' China has ample supplies of domestic chips, Nvidia said, and 'won't and never has relied on American chips for government operations.' China's Ministry of Industry and Information Technology and the Cyberspace Administration of China didn't respond to faxed requests for comment on this story, which is based on interviews with more than a half-dozen people familiar with Beijing's policy discussions. The White House didn't respond to a request for comment. The Chinese government's posture raises questions about the Trump administration's explanation for why the US is allowing those exports mere months after effectively banning such sales. Multiple senior US officials have said their policy reversal was the result of trade talks with China, but Beijing has publicly indicated that the resumed H20 shipments weren't part of any bilateral deal. China's recent notices to companies suggest that the Asian country may not have sought such a concession from Washington in the first place. Beijing's concerns are twofold. For starters, Chinese officials are worried that Nvidia chips could have location-tracking and remote-shutdown capabilities — a suggestion that Nvidia has vehemently denied. Trump officials are actively exploring whether location tracking could be used to help curtail suspected smuggling of restricted components into China, and lawmakers have introduced a bill that would require location verification for advanced AI chips. Second, Beijing is intensely focused on developing its domestic chip capabilities, and wants Chinese companies to shift away from Western chips in favor of local offerings. Officials have previously urged Chinese firms to choose domestic semiconductors over Nvidia H20 processors, Bloomberg reported last September, and have introduced energy efficiency standards that the H20 chip doesn't meet. Nvidia designed the H20 chip specifically for Chinese customers to abide by years of US restrictions on sales of its more advanced hardware, curbs designed to limit Beijing's access to AI that could benefit the Chinese military. The H20 chip has less computational power than Nvidia's top offerings, but its strong memory bandwidth is quite well suited to the inference stage of AI development, when models recognize patterns and draw conclusions. That's made it a desirable product to companies like Alibaba Group Holding Ltd. and Tencent Holdings Ltd. in China, where domestic chip champion Huawei Technologies Co. is struggling to produce enough advanced components to meet market demand. By one estimate from Biden officials — who considered but did not implement controls on H20 sales — losing access to that Nvidia chip would make it three to six times more expensive for Chinese companies to run inference on advanced AI models. 'Beijing appears to be using regulatory uncertainty to create a captive market sufficiently sized to absorb Huawei's supply, while still allowing purchases of H20s to meet actual demands,' said Lennart Heim, an AI-focused researcher at RAND, of China's push for companies to avoid American AI chips. 'This signals that domestic alternatives remain inadequate even as China pressures foreign suppliers.' In his remarks Monday, Trump said China's Huawei already offers chips comparable to the Nvidia H20, echoing previous remarks by officials in his administration who've defended the decision to resume H20 exports partly on those grounds. The US should keep the Chinese AI ecosystem reliant on less-advanced American technology for as long as possible, these officials say, in order to deprive Huawei of the revenue and know-how that would come from a broader customer base. Other administration officials have strongly objected to that logic, Bloomberg has reported, arguing that resuming H20 exports will only embolden China's tech champions and bolster the country's overall computing power. Commerce Secretary Howard Lutnick and other Trump officials have also claimed that the H20 move was part of a deal to improve American access to Chinese rare-earth minerals — despite the Trump team's previous assertions that such an arrangement wasn't on the table. 'As the Chinese deliver their magnets, then the H20s will come off,' Lutnick said last month. Treasury Secretary Scott Bessent said in late July that the magnet issue had been 'solved.' The first Nvidia H20 and AMD MI308 licenses arrived a bit over a week after Bessent's declaration — after Nvidia Chief Executive Officer Jensen Huang met with the president and both companies agreed to share their China revenue with the US government. --With assistance from Yanping Li, Sangmi Cha and Emily Forgash. (Updates with additional analyst commentary in ninth paragraph.) Why It's Actually a Good Time to Buy a House, According to a Zillow Economist Bessent on Tariffs, Deficits and Embracing Trump's Economic Plan The Social Media Trend Machine Is Spitting Out Weirder and Weirder Results The Game Starts at 8. The Robbery Starts at 8:01 Klarna Cashed In on 'Buy Now, Pay Later.' Now It Wants to Be a Bank ©2025 Bloomberg L.P. 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Better Quantum Computing Stock: IonQ vs. Quantum Computing Inc.
Key Points IonQ and Quantum Computing Inc. are racing to develop tech that can overcome the challenges inherent in quantum machines. Quantum Computing Inc. employs photons as a means of building scalable quantum devices, and its sales may be on the verge of taking off. IonQ adopted ions in its approach, and the company saw second quarter revenue rise 82%. 10 stocks we like better than IonQ › The field of quantum computing is exciting. Quantum computers use atomic particles to perform complex calculations beyond the abilities of today's supercomputers, positioning them to revolutionize numerous industries. Many businesses are battling to produce technology that overcomes the challenges inherent in quantum machines. Two for investors to consider are IonQ (NYSE: IONQ) and Quantum Computing Inc. (NASDAQ: QUBT), which also refers to itself as QCi. These companies use different techniques to build quantum devices. IonQ employs ions to perform calculations while QCi utilizes photons. Between IonQ and QCi, one proves to be a better quantum computing investment right now. To understand which one and why, let's dive into both businesses in more detail. Where Quantum Computing Inc. is at today Current quantum computers are prone to calculation errors due to the delicate nature of atomic particles, preventing these machines from scaling up, and limiting their widespread use. Many quantum companies try to minimize errors by subjecting particles to freezing temperatures in expensive, bulky cryogenic equipment. Quantum Computing Inc. takes a different approach. It embraces the inherent chaos of harnessing these particles in a technique called entropy quantum computing. This method allows QCi's machines to operate at room temperature, use less power, and integrate with ordinary computer servers. Despite these advantages, its technology hasn't taken off. In the first quarter, QCi produced revenue of just $39,000. However, its Q1 operating expenses totaled $8.3 million. This chasm between income and expenses eventually will become a death knell for the business if sales don't pick up. But perhaps the company is turning a corner. In April, it sold one of its computers to a large automotive manufacturer, and in July, it secured a purchase valued at $332,000 from a major U.S. bank. The bank's sale is significant considering QCi produced revenue of $373,000 in all of 2024. IonQ's financial ups and downs IonQ's technology also operates at room temperature by using lasers to carefully control ions. It's been winning customers and growing revenue, a sign that its approach shows promise in surmounting quantum computing's shortcomings. In 2024, sales reached $43.1 million, up from the prior year's $22 million. But in Q1, the company's revenue of $7.6 million was flat year over year. This underwhelming result was not a good sign for a business with a Q1 operating loss of $75.7 million. Then in Q2, IonQ's sales trajectory changed once again. This time, revenue came in at an impressive $20.7 million, nearly double the prior year's $11.4 million. Part of this massive increase came from the company's recent acquisitions, as it works toward building a quantum computer network akin to the infrastructure underpinning today's internet. However, the acquisitions resulted in additional expenses, which catapulted IonQ's Q2 operating costs to $181.3 million, a huge increase over 2024's $60.3 million. Consequently, its Q2 operating loss ballooned to $160.6 million versus a loss of $48.9 million in the previous year. To bolster its finances, IonQ executed a $1 billion equity offering in July. This adds to the $1.3 billion in total assets the company exited Q2 with, while total liabilities stood at $168.2 million. Choosing between IonQ and Quantum Computing Inc. In deciding between these two quantum computing companies, one factor to weigh is share price valuation. This can be assessed through the price-to-sales (P/S) ratio, which measures how much investors are willing to pay for every dollar of revenue generated over the trailing 12 months. IonQ's P/S multiple is substantially lower than QCi's, indicating it's a better value. In fact, QCi's P/S ratio is so high, its stock looks overpriced. IonQ's superior sales growth and share price valuation make it a better investment over QCi in the emerging field of quantum computing. That said, buying IonQ stock carries risks, especially in the current macroeconomic climate, which could see inflation rise as a result of the Trump administration's aggressive tariff policies. IonQ's operating expenses are already accelerating, and the economic environment could drive those costs higher. While its balance sheet sports the funds to maintain operations in the short term, the longer-term picture remains murky. Whether IonQ's tech can achieve the quantum computing dominance it seeks is far from certain, and both it and QCi face large competitors with deep pockets, such as Microsoft, which is developing its own quantum computing solution. So only investors with a high risk tolerance should consider IonQ stock. Should you buy stock in IonQ right now? Before you buy stock in IonQ, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and IonQ wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,119,863!* Now, it's worth noting Stock Advisor's total average return is 1,060% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 11, 2025 Robert Izquierdo has positions in IonQ and Microsoft. The Motley Fool has positions in and recommends Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Better Quantum Computing Stock: IonQ vs. Quantum Computing Inc. was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
